Walgreens Begins Recovery Effort from Hurricane Sandy

Published Online: Tuesday, October 30, 2012

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PRESS RELEASE

DEERFIELD, Ill., October 30, 2012 - Walgreens (NYSE: WAG) (Nasdaq: WAG) is beginning recovery efforts in the wake of Hurricane Sandy as the company works to provide its stores with what they need to again serve customers in areas impacted by the storm.

By noon eastern time today, the number of Walgreens stores closed dropped to 530 with more re-opening by the hour, from a peak of about 750 stores closed during the height of the storm last night out of nearly 1,400 stores in the impacted area. Stores that are still closed are primarily due to evacuations, power outages and staff transportation issues. Approximately 300 stores were without power. The company currently has reports of 10 stores with light to moderate damage, but that could increase as access is gained to more locations.

Walgreens is communicating with team members through the company intranet, its Security Operations Center, conference calls and individual calls. There have been no reports of Walgreens team member injuries, however many suffered personal property damage due to flooding and other weather related issues. Walgreens has taken a number of proactive measures to ensure employee safety, including ride-sharing arrangements and providing hotel rooms for some who are in need of housing.

Walgreens is in contact with the American Red Cross to offer assistance to first responders and to local communities impacted by the storm. Walgreens also anticipates requests in the coming days from relief agencies, charitable organizations and emergency management services.

Walgreens expects closed stores to resume normal hours most quickly in Virginia, Delaware, Maryland, Connecticut, Rhode Island and Massachusetts. More severe infrastructure issues may cause longer delays in West Virginia, New Jersey, Pennsylvania and New York City. In advance of the storm, Walgreens secured more than 180 electric generators and stationed them for deployment based on severity of need and expected length of power outage. Deployment was rapidly occurring today and this is helping to reopen stores. A number of stores have independent generating capacity permanently on location. Supplies of dry ice were also obtained in advance to ensure proper refrigeration of medications that require it.

Walgreens distribution center at Windsor, Conn., was without electric utility power for several hours and relied on emergency generators to continue partial operation. Full power was restored this morning and the facility expects to be adequately staffed to resume normal operation within hours.

A Maspeth, N.Y., distribution facility that serves Duane Reade stores has full power and is working to assist staff trying to get to work in the absence of mass transit service. Road and bridge closures are causing problems for delivery trucks in the New York metropolitan area.

Another distribution center in Bethlehem, Penn., was without power as of noon eastern time, but the building is intact. A smaller distribution facility in Nazareth, Penn., sustained roof damage and flooding, which will require repairs before resuming operations. Where distribution centers are affected by the hurricane, Walgreens will shift to alternate centers to supply medicines, water and other essentials. It also has relationships with third party suppliers who can fill gaps in distribution.

Late last week, Walgreens began delivering extra merchandise to locations in the path of the storm. Items most in demand included both perishable and non-perishable food items, bottled water, flashlights, batteries and magazines. Walgreens will be working to get stores re-stocked as soon as is safely possible.